Telesat Reports Results for the Quarter and Nine Months Ended September 30, 2023

Ottawa, Canada, November 6, 2023–Telesat (NASDAQ and TSX: TSAT), one of the world’s largest and most innovative satellite operators, today announced its financial results for the three and nine-month periods ended September 30, 2023. All amounts are in Canadian dollars and reported under International Financial Reporting Standards unless otherwise noted. 

“I am pleased with our financial and operating performance for the third quarter and first nine months of the year,” commented Dan Goldberg, Telesat’s President and CEO. “We remain on track to meet our guidance and, as a result of our continued disciplined execution, delivered industryleading Adjusted EBITDA margins1 , high capacity utilization, a substantial contractual backlog of CDN $1.5 billion, and a cash balance of CDN $1.8 billion. In addition, in the third quarter and subsequent period we strengthened our financial position by repurchasing debt with a cumulative face value of US$195 million, received the remaining C-band proceeds from our U.S. spectrum clearing efforts, and successfully completed in-orbit testing of our LEO 3 demonstration satellite.” 

Goldberg added: “Certainly the big development for Telesat in the third quarter was our news regarding Telesat Lightspeed, including the announcement in August that we selected MDA to be the prime satellite contractor for Telesat Lightspeed and that the program is now fully funded – subject to concluding definitive funding agreements – through global service delivery, followed by our announcement in September that we entered into a contract with SpaceX for fourteen Falcon 9 rockets to launch the advanced Telesat Lightspeed satellites. The Telesat and MDA teams are making strong progress on moving the Telesat Lightspeed program forward, including ramping up staff and engaging with the supply chain. We firmly believe that Telesat Lightspeed will revolutionize broadband connectivity for enterprise and government users and represents a highly compelling growth and value creation opportunity for Telesat and its stakeholders.” 

For the quarter ended September 30, 2023, Telesat reported consolidated revenue of CDN $175 million, a decrease of 3% ($5 million) compared to the same period in 2022. When adjusted for changes in foreign exchange rates, revenue declined 4% ($8 million) compared to 2022. The decrease was primarily due to lower revenue from certain South American customers. 

Operating expenses for the quarter wereCDN $50 million, a decrease of $6 million from 2022. When adjusted for changes in foreign exchange rates, operating expenses decreased by $7 million compared to 2022. The decrease was primarily due to lower non-cash share-based compensation, partially offset by higher costs associated with the procurement of third party satellite capacity required to support certain customer networks that could no longer be supported on Anik F2 once it commenced inclined operations. 

Adjusted EBITDA1 for the nine-month period was CDN$ 410 million, a decrease of 4% ($19 million) or, when adjusted for foreign exchange rates, a decrease of 7% ($30 million). The Adjusted EBITDA margin1 was 76.2%, compared to 77.6% in the same period in 2022. For the nine months ended September 30, 2023, Telesat’s net income wasCDN$ 545 million compared to a net loss of $172 million for the same period in the prior year. The positive variation was principally due to U.S. C-band clearing proceeds recognized in the second quarter of 2023 combined with a positive variation in foreign exchange gain (loss) on the conversion of U.S. dollar debt into Canadian dollars and a higher gain on the repurchase of debt.